U.S. Tax Guide
Form 1040 vs. 1040-NR: Which U.S. Tax Return Should You File?
If you are living, studying or working in the United States, one of the most important questions when filing your taxes is whether you should file Form 1040 or Form 1040-NR.
The answer is not determined by your visa alone.
Your U.S. tax residency status generally determines which federal income tax return applies to you. Depending on your circumstances, you may be treated as a resident alien, nonresident alien or, in some years, a dual-status individual for U.S. tax purposes.
Comparison
1040 vs. 1040-NR — What's the Difference?
Form 1040
Form 1040 is the individual income tax return generally used by U.S. citizens and U.S. resident aliens.
A resident alien is generally subject to U.S. income tax rules in substantially the same way as a U.S. citizen and generally reports worldwide income, subject to applicable exclusions, credits and other tax rules.
Form 1040-NR
Form 1040-NR is the U.S. Nonresident Alien Income Tax Return.
It is generally used by nonresident aliens who have a U.S. federal income tax filing requirement. The taxation of a nonresident alien generally focuses on U.S.-source income and income effectively connected with a U.S. trade or business, although specific rules and treaty provisions may apply.
| Category | Form 1040 | Form 1040-NR |
|---|---|---|
| Generally used by | U.S. citizens and resident aliens | Nonresident aliens with a filing requirement |
| Tax residency | Resident | Nonresident |
| Worldwide income | Generally reported | Generally different source-based rules apply |
| Common situations | U.S. citizens, green card holders and individuals meeting applicable residency rules | Certain international students, scholars, foreign professionals and other nonresidents |
| Residency analysis important? | Yes | Yes |
Important: Your immigration classification alone does not necessarily determine your U.S. tax residency. Tax residency must be determined under U.S. tax rules.
Tax residency
Step 1: Determine Your U.S. Tax Residency
For a non-U.S. citizen, U.S. federal tax residency is generally determined using two primary tests:
Green Card Test
You generally meet the Green Card Test if you are a lawful permanent resident of the United States during the calendar year under U.S. immigration law.
If you meet this test, you are generally treated as a U.S. resident for federal income tax purposes, subject to special rules that may apply in certain circumstances.
Substantial Presence Test
If you do not meet the Green Card Test, the next important question may be whether you meet the Substantial Presence Test (SPT).
Generally, you meet the test if you were physically present in the United States for at least:
during the current year
during the three-year period
The weighted-day calculation
of qualifying days in the current year
of qualifying days in the previous year
of qualifying days in the second preceding year
However, not every day of physical presence necessarily counts toward this calculation. Certain exclusions and exceptions may apply.
Not Every Day in the U.S. Necessarily Counts
This is particularly important for international students.
Certain individuals temporarily present in the United States under F, J, M or Q status may qualify as “exempt individuals” for purposes of the Substantial Presence Test.
The term exempt individual does NOT mean that you are exempt from paying U.S. taxes.
It means that certain days of U.S. presence may be excluded when determining whether you meet the Substantial Presence Test.
For example, qualifying students in F status may generally exclude days for a limited number of calendar years. After the applicable period, the residency analysis can change depending on the individual's circumstances.
Individuals claiming qualifying excluded days generally need to consider Form 8843 — Statement for Exempt Individuals and Individuals With a Medical Condition.
Are you studying or working under F-1, OPT or STEM OPT status?
Explore our F-1, OPT & STEM OPT Tax Filing GuideWhat About H-1B Professionals?
Being in H-1B status does not, by itself, tell you whether you should file Form 1040 or Form 1040-NR.
Your U.S. tax residency must still be determined under the applicable tax residency rules.
Because H-1B presence generally does not receive the student-day exclusion applicable to qualifying F-1 students, days of U.S. presence can become particularly important when applying the Substantial Presence Test.
This can also become more complicated during a year in which someone changes from F-1/OPT to H-1B status, because the treatment of days for the residency calculation may change.
Working in the U.S. under H-1B status?
Explore our H-1B Tax Filing & Tax Residency GuideWhat If Your Tax Residency Changes During the Year?
Some taxpayers are both a nonresident alien and a resident alien during the same tax year.
This is known as a dual-status tax year.
It commonly occurs during a year of arrival in or departure from the United States, but it can also arise when an individual's circumstances cause their U.S. tax residency to change during the year. Different tax rules can apply to the resident and nonresident portions of the year.
The return used in a dual-status situation also depends, among other things, on whether the taxpayer is a resident or nonresident at the end of the tax year. Special elections may also be available in certain circumstances.
Because dual-status returns have special filing rules and limitations, they should be reviewed carefully rather than assuming that an ordinary Form 1040 or Form 1040-NR alone is appropriate.
Common 1040 vs. 1040-NR Filing Mistakes
A wrong residency determination can affect much more than the name of the tax form.
- Assuming that your visa automatically determines your tax residency.
- Filing Form 1040 because tax software defaulted to a resident return.
- Filing Form 1040-NR without first checking whether you became a resident alien.
- Incorrectly counting or excluding days under the Substantial Presence Test.
- Overlooking Form 8843 when it applies.
- Missing a possible dual-status year after a change in circumstances.
- Overlooking foreign income or foreign financial reporting considerations after becoming a U.S. tax resident.
- Assuming that a return filed in a prior year must also be the correct form for the current year.
Starting framework
So, Which Tax Return Should You File?
- 1
Are you a U.S. citizen?
Form 1040 generally applies.
- 2
Are you a lawful permanent resident?
Review the Green Card Test and applicable residency rules.
- 3
No green card?
Determine whether you meet the Substantial Presence Test.
- 4
Can certain U.S. presence days be excluded?
Apply the applicable exclusion rules before completing the SPT calculation.
- 5
Resident alien for tax purposes?
Form 1040 generally applies.
- 6
Nonresident alien with a federal filing requirement?
Form 1040-NR generally applies.
- 7
Resident for part of the year and nonresident for another part?
Dual-status filing rules may need to be considered.
This is a starting framework rather than a substitute for an individual tax-residency analysis. Elections, treaty positions, closer-connection rules and other exceptions can change the result in particular circumstances.
Not Sure Whether You Should File 1040 or 1040-NR?
Determining the correct return may require more than checking your current visa.
ACB Consultants can review relevant information such as your:
- Immigration and visa history
- Dates of U.S. presence
- Changes in immigration status
- Income documents
- Prior-year U.S. tax filings
- Foreign income and cross-border circumstances
Based on your circumstances, we can help identify the U.S. tax filing requirements that may apply and assist with the appropriate tax filing process.
Get Help With Your U.S. Tax FilingQuestions
Frequently Asked Questions
The information on this page is provided for general educational purposes and should not be treated as legal, immigration or individualized tax advice. U.S. tax residency and filing requirements depend on individual facts and circumstances, and tax treaties, elections, exceptions and other rules may affect the outcome.
ACB Consultants is not a law firm or immigration advisory firm. Where legal or other regulated professional advice is required, clients should consult an appropriately licensed professional.
See all U.S. Services.